China’s airlines returned to profit in 2009 as traffic rose, fuel prices fell and government policies provided a favorable tailwind, but analysts warn they could face fresh turbulence this year.
The country’s three biggest carriers – China Southern Airlines, Air China and China Eastern Airlines – all suffered heavy losses in 2008 as the global economic crisis struck, but said this month they will be in the black for 2009.
The industry as a whole posted a combined profit of $1.1 billion in 2009 and passenger volume grew 19.7% to 230 million.
But analysts said while the outlook remained solid for 2010, the airlines would lose steam as the explosive growth in passenger volume slowed, with some travelers opting to stay home and others looking at cheaper forms of transport.
Channel News Asia reported Credit Suisse analysts said in a research note,"While we think the outlook remains positive, the pace of traffic growth should moderate, as travelers are more concerned about general inflation and rising property prices."